English courts will not consider training or regulation of foreign lawyers when assessing privilege

The Commercial Court has held that communications between a Russian business and its in-house legal department were privileged even though they would not have been entitled to the equivalent protection before the Russian courts.

Background

English law treats privilege as a question for the law of the forum. Therefore, although the communications in this case took place between a Russian client and Russian in-house lawyers, the claim to privilege had to be determined under English law.

Under English law, legal advice privilege applies to communications between a client and a lawyer if the dominant purpose of those communications was the giving or receiving of legal advice. Case law has consistently held that a “lawyer” for this purpose can be a foreign lawyer. However, prior to this case, the English courts had not considered whether it matters if the foreign jurisdiction recognises different types of lawyer, some of whom are entitled to the local equivalent of privilege while others are not.

In PJSC Tatneft v Bogolyubov and others [2020] EWHC 2437 (Comm), one of the defendants applied for specific disclosure of communications between the claimant and its Russian legal department. In the Russian courts, these communications would not have been protected because, like all in-house lawyers in Russia, the members of the legal department were not independent advocates regulated by the Russian Bar. In excluding in-house lawyers from the scope of protection, Russian court practice is similar to that of the Court of Justice of the European Union (see in particular Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v Commission (Case C-550/07 P) [2010]) and many other civil law jurisdictions. The defendant argued that for this reason, the communications also should not be protected by legal advice privilege in the English proceedings.

The issues

The Commercial Court was required to decide whether or not it matters, for the purpose of legal advice privilege:

1. what form of legal qualification the foreign lawyer holds (e.g. advocate or other legal status); or
2. which bar association or other body, if any, regulates the foreign lawyer, given that in Russia (and many other jurisdictions) the equivalent of privilege is closely linked to the ethical obligations imposed on the legal profession.

The decision

Moulder J held that, in the interests of certainty and convenience, English courts should not enquire as to the qualifications or regulatory arrangements of a particular category of foreign lawyers or of an individual within that category. It followed from this principle that the English courts should not treat a foreign in-house lawyer differently from a foreign lawyer in private practice.

The key, according to the judge, was whether or not a lawyer-client relationship existed and whether or not the communications were a function of that relationship. The first element was met in the present case. An argument that the communications were commercial in nature and therefore not a function of the lawyer-client relationship was ruled inadmissible because it had not been raised until relatively late in the proceedings.

In reaching this conclusion, the court noted that cases on privileged communications involving English lawyers were of limited assistance because the case law treated foreign lawyers as a separate category. Thus, for instance, a decision on the effects of an English lawyer being struck off the register of solicitors did not shed any light on the approach the court should take to the status of foreign lawyers.

Conclusion

Multinational companies will welcome this confirmation that the English court will not concern itself with the details of their in-house lawyers’ regulatory arrangements and qualifications when deciding on questions of legal advice privilege.

Parties wishing to challenge a claim to privilege involving an in-house legal department are likely to meet with more success by focusing on whether the communications are truly legal rather than commercial in nature, especially as the courts in other recent cases have shown themselves willing to take a strict view on this question.

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